Opening Bell: 1.4.18

Morgan Stanley Wealth Exits Junk Bonds, Warns on Recession Risk (BBG)
“While the tax cuts just enacted in the U.S. may lead to better growth in the short term, they may also bring forth the excesses we typically see before a recession — which is something credit markets figure out before equities,” according to the note. “We recently took our remaining high yield positions to zero as we prepare for deterioration in lower-quality earnings in the U.S. led by lower operating margins.”

Intel's CEO reportedly sold shares after the company already knew about massive security flaws (CNBC)
According to an SEC filing in late November, Krzanich acquired and sold 644,135 shares at a weighted average price of $44.05 by exercising his options. Those options let him purchase the shares at prices between $12.985 and $26.795, significantly lower than where Intel was trading at the time. He sold another 245,743 shares that he already owned at a weighted average of $44.55. That brought down the total number of shares he owns to 250,000 — which is the minimum number of shares that the CEO of Intel is required to own, according to a Motley Fool report. Krzanich sold all of those shares for a little over $39 million, apparently netting about $25 million.

Merrill Lynch Bars Trading of Bitcoin Fund, Futures (WSJ)
Merrill Lynch has blocked clients and financial advisers who trade on their behalf from buying bitcoin, citing concerns over the cryptocurrency’s investment suitability. The ban applies to all accounts and precludes the firm’s roughly 17,000 advisers not only from pitching bitcoin-related investments but also from executing client requests to trade the Grayscale Investment Trust bitcoin fund, according to a person familiar with the matter. RELATED: Egypt's Religious Leader: Crypto Trading Forbidden Under Islamic Law

JPMorgan, Goldman Sachs come top of banker pay league in Britain (Reuters)
JPMorgan and Goldman Sachs paid their top bankers in Britain an average of $1.5 million each in 2016, compared with $1 million for local rivals HSBC and Barclays, data released by the banks last year shows. Data compiled by Reuters from 13 banks’ filings, some of which were released only late last month, shows they paid an average of $1.06 million to such staff in 2016, down from $2 million for the year ended Dec. 31, 2013 when new European Union rules aimed at curbing banker bonuses took effect.

Bank analyst very proud of his cryptocurrency mining rig (FT Alphaville)
Our guy at RBC published “The $10tril Bull Case” — not just a bullish piece, mind you, the bullish piece — for “the Crypto-Currency space.” Steves also included a photo of a home-built digital currency “mining rig” in his 3 Jan note, metaphorically shaking his fist into the mighty gale of Mifid II the day it made landfall.

Bracing Yourself for a Possible Near-Term Melt-Up: A Very Personal View (Jeremy Grantham)
I find myself in an interesting position for an investor from the value school. I recognize on one hand that this is one of the highest-priced markets in US history. On the other hand, as a historian of the great equity bubbles, I also recognize that we are currently showing signs of entering the blow-off or melt-up phase of this very long bull market. The data on the high price of the market is clean and factual. We can be as certain as we ever get in stock market analysis that the current price is exceptionally high. In contrast, my judgment on the melt-up is based on a mishmash of statistical and psychological factors based on previous eras, each one very different, so that much of the information available is not easily comparable. Yet, strangely, I find the less statistical data more compelling in this bubble context than the simple fact of overpricing. Whether you will also, dear reader, remains to be seen.

Why Low Inflation Is No Surprise (Project Syndicate)
In my view, interpreting today’s low inflation as a symptom of temporary supply-side shocks will most likely prove to be a mistake. This diagnosis seems to misread the historical evidence from the period between the early 1970s and the late 1990s, and is thus based on a fundamentally flawed assumption about the primary driver of inflation in the global North since World War II.

"You Can’t Make This S--- Up": My Year Inside Trump's Insane White House (Michael Wolff/Hollywood Reporter) Donald Trump's small staff of factotums, advisors and family began, on Jan. 20, 2017, an experience that none of them, by any right or logic, thought they would — or, in many cases, should — have, being part of a Trump presidency. Hoping for the best, with their personal futures as well as the country's future depending on it, my indelible impression of talking to them and observing them through much of the first year of his presidency, is that they all — 100 percent — came to believe he was incapable of functioning in his job. At Mar-a-Lago, just before the new year, a heavily made-up Trump failed to recognize a succession of old friends.